Naming a Family Member as Successor Trustee: Pros & Cons
Be thoughtful when choosing successor trustees for your living trust.

Naming a Family Member as Successor Trustee: Pros & Cons

In this video, Cindy discusses the pros and cons of naming a family member, such as an adult child, as your successor trustee of your revocable living trust.

Other articles/videos you may find interesting:

Don’t Give Your House to Your Kids

Gun Trusts Gone Bad

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Administering a Special Needs Trust

Administering a special needs trust isn't for the faint of heart or the disorganized.
Administering a special needs trust isn’t for the faint of heart or the disorganized.

So, you’ve been asked to be the Trustee of a family member’s special needs trust (SNT). Of course, you said yes. But do you really have any idea what your responsibilities will be?

Acting as a trustee of a plain vanilla revocable living trust is pretty easy – you handle bank and investment accounts, sell real estate, and distribute income property to the people named in the document just as you would do in your normal life. There are no special rules or taxes you have to worry about.

But when you’re the trustee of a special needs trust, you have complete responsibility to know Social Security laws inside and out, and you could be held legally and financially responsible if you make a distribution that causes the beneficiary to be kicked off a needs-based government program, such as Medicaid or SSI. If the beneficiary’s medications, without Medicaid, cost $30,000/month, even losing one month of coverage could be financially devastating.

So, are you wondering what you, as a SNT Trustee, can and can’t do? Well, as Trustee, you must control every single cent in the SNT. You mustn’t give the beneficiary of the SNT any money to make purchases for him or herself. Payments for goods and services should be made by you directly to the vendor or provider. A non-refundable, prepaid gift card is permitted as it allows the beneficiary the right to obtain goods or services. In keeping with this principle, a non-refundable airline ticket, or a non-refundable ticket to a show or sporting event would also be permitted. You, as Trustee, may purchase a specific service for the beneficiary, since the service is not easily convertible to cash. For example, payment for any special therapy or training is acceptable.

But an SSI and/or Medicaid recipient may use funds in the SNT to pay for household emergencies such as the repair of a roof or payment of a telephone bill. The Trustee should purchase any household goods or items in the name of the trust and not in the name of the beneficiary. This avoids the possibility that the beneficiary could have control over the goods or items; the appearance of such control could result in a loss of benefits. If a beneficiary receives ownership or control of an asset as the result of the Trustee paying the bill for said asset, this could be deemed as income to the beneficiary, which may disqualify him or her from benefits in the months received.

Here are some types of purchases that can be made by the Trustee of an SNT for the beneficiary and how they would affect the beneficiary’s eligibility for Medicaid and/or SSI:

(a) The purchase of a home, by the Trustee of the SNT, for the beneficiary will not affect his or her benefits if the title to the house is held in the name of the trust. The house will not be deemed a resource of the beneficiary, and would not affect his or her eligibility for benefits. The beneficiary is treated as if he or she is residing in his or her home, and not deemed to be receiving shelter, which would impact eligibility for benefits.

Payments made by the Trustee for the expenses associated with the real property, such as taxes, rent, heat, gas, water, electricity, mortgage, garbage removal and sewer would affect the beneficiary’s eligibility for benefits as they would be considered income to the beneficiary. So, the beneficiary should be able to afford those expenses with his or her other income; consider that when purchasing a home. However, home improvements or renovations are not considered income, and would not affect the beneficiary’s eligibility for benefits;

(b) The Trustee’s purchase of cable TV or satellite TV services, cell or home telephone service, internet service, newspaper and other news related magazines and periodicals will not impact the beneficiary’s eligibility for benefits. The Trustees purchase of computers, computer software and any upgrades for the computer are also permissible expenditures;

(c) The purchase of an automobile for the beneficiary of the SNT will not impact his or her eligibility for benefits.  Additionally, the expenses for the automobile insurance, maintenance and fuel are permitted. However, the purchase of fuel for the automobile can be problematic depending on how payment of the fuel is made. It is recommended that Trustee open a gas company credit card in the name of the SNT that can only be used by the beneficiary for gas purchases;

(d) The Trustee can make unlimited expenditures for the travel and entertainment expenses of the beneficiary. If the beneficiary is unable to travel alone, distributions from the SNT for a travel companion are permitted. However, the payment of a beneficiary’s hotel expenses can be problematic as the argument could be made that they are shelter expenses. However, the argument can be countered if the beneficiary maintains a home;

(e) Household furnishings and furniture, and personal effects can be purchased by the trust; there is no bright-line limit. If the beneficiary wants leather furniture, a 110″ Ultra HDTV, and a surround sound system, the Trustee can purchase those;

(f) Pre-Paid funeral and burial arrangements can be owned by the trust for the benefit of the beneficiary. The arrangements should not be owned by the beneficiary as it could impact SSI benefits;

(g) Legal and Accounting Fees can be paid by the Trustee without impacting the beneficiary’s eligibility for benefits;

(h) The Trustee can purchase clothing for the beneficiary without effecting the beneficiary’s eligibility for benefits. Again, there’s no monetary limit – clothing can be purchased at Goodwill or Saks Fifth Avenue;

(i) The Trustee, without any limitations, can purchase and make payment of durable medical equipment, therapy, medication, alternative treatments, tuition, books, tutoring, and care management – as long as no government program would provide those particular things.

(j) The Trustee can pay the beneficiary’s taxes.

This is NOT a detailed and all-inclusive list; the Trustee is completely responsible for researching Social Security rules and/or hiring professionals or a corporate co-trustee to make sure all the t’s are crossed and i’s dotted. But this should provide you with a better understanding of what the Trustee of a SNT is generally permitted and not permitted to do without affecting the beneficiary’s eligibility for Medicaid and/or SSI as part of the day to day administrator of a SNT.

Being the Trustee of a SNT is a challenging and complicated task; be sure you’re up to it before you agree to serve. If this isn’t for you, make sure the person naming you knows now so he or she can appoint another family member or, better yet, a corporate trustee that handles these SNTs all the time.

Other articles you may find interesting:

Tax Implications of a Medicaid Personal Service Contract

Should I Use a Bank as My Executor Instead of a Family Member?

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Estate Planning for Same Sex Couples

same sex couplesNow that same-sex marriage is legal in every state, including Florida, I personally haven’t noticed that estate planning is generally any different now for same-sex married couples versus opposite-sex married couples. But this article does raise some valid points, which same-sex couples (married or not) should address when doing their estate planning.

  1. If you created your estate planning documents before you were legally married, you need to re-do them now. In Florida, spouses have statutory rights that significant others don’t.
  2. If you didn’t execute a prenuptial agreement before you were married, you may want to consider executing a postnuptial agreement or spousal waiver so you can bypass Florida laws and each leave your assets to whoever you want, in any amounts you want. This is especially important if either or both of you have children from other relationships.
  3. If you don’t have a valid Florida Durable Power of Attorney that authorized your spouse (or significant other) to make financial and legal decisions for you, someone will have hire a lawyer and go to guardianship court to get that power over you. It may not be the person you’d choose.
  4. If you don’t have a valid Florida Designation of Health Care Surrogate, Florida law will allow your spouse to make medical decisions for you when you can’t. (Your significant other has no legal rights). But what if your spouse is comatose in the bed next to you? Who will then be making your health care decisions? Florida statutes have a plan for you, but it may not be the one you want.
  5. If you don’t have a valid Living Will (also known as a Declaration to Die a Natural Death), Florida’s presumption is that you want to be kept alive using all available extraordinary measures. Without that document stating your clear-headed choice to die a natural death, you are forcing your spouse (and then whoever the state gives that authority to after your spouse) to decide whether you should live or die. No one should be forced to live with that decision; they (or your other family members) will second guess that decision forever.
  6. Many couples today have no human children, but have pets they love and care for as if they were their children. Have you made a definite, written plan for their care in the event neither of you can care for them due to death or disability/nursing home admittance? If not, the chances are very good they’ll end up in a shelter or euthanized. Leaving Fluffy to your niece along with $5000 in your Will is NOT a plan. She can legally take the cash and drop Fluffy off by the side of the road. Consider a pet trust, which separates the money from the care of the pet.

These suggestions apply to all couples, but same-sex couples may have some unresolved family dynamics that may make creating or updating an estate plan even more important.

Other articles you may find interesting:

Pet Trusts: Because Moose Isn’t an Xbox

Inheritance Distributions: Showing Your Children the Love

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Do I Need a Will or a Trust?

In this video, Cindy answers a common question regarding whether a Will or a Trust is appropriate for your situation.

Other articles/videos you may find interesting:

9-Step Guide for a Personal Representative

Durable Power of Attorney: What You Need to Know

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

Can Medicaid Take Your Home?

 

Medicaid takes your house
There are legal ways to prevent Medicaid from taking your home.

This article is so sad … a 90-year old grandmother was neglected and left to die by her live-in family members because they were afraid to apply for Medicaid for her. They thought Medicaid would take the grandmother’s home and they’d be left homeless.

While every state has different homestead and Medicaid laws, in Florida, most people will not lose their home to Medicaid if they need long-term care.

First, our state Medicaid rules don’t include your home as an asset. However, if your home needs to be sold while you’re receiving Medicaid, and planning wasn’t done ahead of time, the cash proceeds will be counted and you could be kicked off Medicaid.

A married applicant can transfer the home to her spouse who still lives there. (However, that may create a problem if that spouse later needs Medicaid).

There are ways to protect the home of an unmarried Medicaid applicant, and still be eligible for Medicaid. The applicant could transfer the home to:

  • A child who is under age 21 or who is blind or disabled;
  • Into a trust for the sole benefit of a disabled individual under age 65 (even if the trust is for the benefit of the Medicaid applicant, under certain circumstances);
  • A sibling who has lived in the home during the year preceding the applicant’s institutionalization and who already holds an equity interest in the home;
  • A “caretaker child,” who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant’s institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

Or, even better, protect the home through a little advanced planning. This may include use of certain trusts to protect the house from estate recovery.

What’s estate recovery? That’s when Medicaid takes your assets when you die to pay back the government for what it spent on your care. Again, every state has different laws about Medicaid estate recovery. In Florida, at this moment in time, Medicaid can only take your assets that go through probate. No probate? No recovery. That law will likely change as more and more people use Medicaid to pay for their long-term care costs.

Don’t operate on fear or misinformation. Talk with an elder law attorney long before Medicaid might be needed. Learn your options and make an educated decision.

Other articles you may find interesting:

Be Aware of Where You’re Getting Estate Planning Advice

4 DIY Estate Planning Fails

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Simple Safety Tips for Seniors

Safety tips
Don’t make it easy for the bad guys to know you’re alone.

During a recent sunrise walk around my neighborhood on garbage pickup day, I found myself unconsciously saying to myself on several occasions, “Only one person lives in that house.” It was so obvious – one half-filled white bag of trash on a street filled with homes with multiple large trash bins and overflowing recycling containers. A quick glance at the half-empty recycling bins told me that the person living alone in that house was likely a senior – a few empty cans of pet food, maybe an empty bottle of wine or a few beer cans, a couple of Ensure bottles, and several newspapers.

Almost no one under age 65 reads hard copy newspapers anymore, so seeing newspapers in a driveway or recycling bin is a dead giveaway that it’s very likely that a senior is in the home.

I had no criminal intent while unconsciously doing this casual recon, but if it was that easy for me to spot which homes would likely be easy targets for valuables and prescription drugs, imagine how easy it would be for a bad guy.

So, here are a few commonsense safety tips for seniors:

  1. Always put out a rolling trash bin – even if you only have a small bag of trash. Yes, you’ll have to walk down your driveway twice, but you’ll no longer be advertising “I’m all alone in this house.”
  2. If you choose to recycle, save your recycling until the bins are full. It may take a month, but if you rinse out any containers, bugs in your garage shouldn’t be a problem. If the bins will be heavy, consider a rolling recycling bin cart. Your kids are always asking what you want for Christmas 🙂
  3. I’ve heard safety professionals recommend this: keep a big dog bowl of water and maybe even a big dog bone near your back door – the kind a German Shepherd would use. Some folks even advise using a recording of a large barking dog that’s triggered when the front doorbell rings. Or even playing a looping soundtrack of random large dog noises when you’re gone. Criminals generally ring the doorbell first to see if anyone is home, so the theory is that the possibility of encountering a big dog may encourage the would-be thief to seek an easier target. No one is afraid of a little yappy dog; one good kick and it’s no longer a problem for the bad guy. Sad, but true.
  4. Speaking of security, consider a monitored home security system. If your home has a security system already installed, but you can’t afford the monthly monitoring fee, at least use the non-monitored alarm (usually a siren of some sort) so you and your neighbors are alerted if someone tries to break into your home. If you don’t know how to operate it, call the number on the keypad.
  5. Install a Ring doorbell video system. If you have a smartphone, you’ll be alerted when someone approaches your front door, or rings your door bell. An, if there’s a problem later on at your home or a neighbor’s home, you can go back through the video to see if it captured a picture of the culprit.
  6. Make sure you share contact information with both of your next-door neighbors and someone across the street. Most people are very willing to help out a neighbor.
  7. Change your routines. Do you always go grocery shopping on Mondays at 10 am? To the hairdresser or barber shop on the same day and time each month? Or take a long walk at the same time each day? Bad guys look for routines, so change it up.
  8. Here’s a routine that should not change – contact someone  (a family member or friend) very regularly. Perhaps once a day or once a week, just to let them know you’re okay. Even a quick text message can do the trick.
  9. Consider some kind of monitored personal alert system – the kind you keep in a pocket, on your wrist, or around your neck.
  10. If you’re reasonably mobile, consider taking a self-defense class. It’s not always about force and bodily strength. I took a 2-hour seminar at Systema Berkoot in Sarasota and was amazed at what I saw and learned in that short time. Age, bad knees or a bit of arthritis won’t stop you from learning this amazing art. It’s not about confrontation, but about using physics and an attacker’s own bodily weaknesses against him. Did you know we all have pressure points? Or that you can easily escape someone’s grip on your arm?
  11. Finally, consider keeping one or more weapons near you at all times. Stow them around your house and garage. A weapon can be a gun, a knife, a stun gun, a baseball bat, bear or pepper spray, or even a golf club. If you want to stop an attacker or intruder before he gets close to you, a gun is your best choice. If you’re okay with letting things get up-close and personal before defending yourself, and you’re physically fit, a baseball bat or golf club may be all you need. A stun gun, pepper or bear spray, or knife is a defense of last resort – your attacker has to be within kissing distance for them to be effective. If you have physical limitations, seriously consider a gun. Age, weight, height, gender, etc. doesn’t matter – there’s a gun that will work for you. But what does matter is learning how to properly use a gun and understanding state and federal gun laws. Even grannies can safely learn how to shoot! Call your local gun shop for instructor recommendations.

Stay safe – someone loves you.

Other articles you may find interesting:

Financial Infidelity that Appears after One Spouse Dies

Does Mom Have to Pay Dad’s Credit Card Debt after He Dies?

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Will my Illinois Will Work When I Move to Florida?

In this video, Cindy answers a common question regarding whether new estate planning documents are needed when you move to Florida from another state.

Other articles/videos you may find interesting:

What’s a Lady Bird Deed?

Durable Power of Attorney: What You Need to Know

***Want to learn more about how to protect your family from the government, lawsuits, accidental disinheritance, or nursing homes? Click THIS LINK to book a seat at one of our upcoming fun and educational workshops.***

What’s the Difference? Living Will, Health Care Surrogate, DNR

DNR Living Will
A Florida Do Not Resuscitate Order (DNR) must be printed on yellow paper.

Confused about the differences between a Designation of Health Care Surrogate, Living Will, and a Do Not Resuscitate Order (DNR)? Here’s a quick explanation…

Living Will

Your Living Will (sometimes called a Declaration of a Desire for a Natural Death) informs your doctors that, if you’re terminally ill and/or in a vegetative state, and your doctors have said there’s no reasonable medical probability of recovery, you do not want extraordinary medical measures (CPR, ventilators, tube feeding, etc.) taken, especially those that would cause you pain or discomfort, if those measures would only prolong the dying process. In Florida, your Health Care Surrogate has a duty to enforce your Living Will. Anyone can deliver this document to your doctors if your Health Care Surrogate is unavailable.

Designation of Health Care Surrogate

Your Designation of Health Care Surrogate authorizes your Health Care Surrogate to make medical decisions for you if you cannot express your wishes or make the decisions yourself. It also allows your Health Care Surrogate to, among other things, hire and fire medical providers, and to obtain copies of your medical records.

Do Not Resuscitate Order (DNR)

A DNR is not prepared by a lawyer. It is a state-specific health care form that deals specifically with the refusal of cardiopulmonary resuscitation (CPR) in the event of cardiac or pulmonary arrest. It is a physician’s order, signed and dated by the patient (or Health Care Surrogate) and the physician.

A DNR is honored in most health care settings, including hospices, adult family care homes, assisted living facilities, emergency departments, nursing homes, home health agencies and in hospitals. In addition, when the DNR is presented to an emergency medical technician or paramedic in a setting other than a health care facility, the form may be honored.

Florida law requires that the form must be printed on yellow paper. The form is not valid unless it is printed on some shade of yellow paper. EMS providers and hospitals are not obligated to honor a form printed on white paper or any other color than yellow. The DNR form should be kept in a noticeable, easily accessible place such as the head or foot of a bed, or on the refrigerator.

Other articles you may find interesting:

9-Step Guide for a Personal Representative

Preparing for the Challenges of Aging

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.

Free Legal Advice – Worth Every Penny

legal advice ahead
“Free advice is often overpriced.” ~ Charles E. McKenzie

As an estate planning and elder law attorney, I focus on planning. I try to help my clients avoid potential problems later on by setting things up correctly now. One of the most frustrating things I come across is when good people rely on bad legal advice from their friends or neighbors, their hairstylist, their golfing buddy, or random people on Facebook. The sad part is that most people won’t even know they received bad advice because things won’t blow up until they’re incapacitated or dead.

Believe me, I get it. Lawyers cost money. It’s much cheaper to ask for free legal advice. And sometimes the person tendering the advice is actually correct. But what happens when they aren’t?

The problem is that what may be the best legal advice for one person may be completely wrong for another. Or, the laws may have changed. And, what works in New York or Illinois may not work the same way in Florida.

Here are some examples of really bad legal advice give by well-meaning folks pretending to be lawyers:

  • “You don’t need a Will or Trust. Just put beneficiaries on everything.” Yeah…that rarely works except maybe between spouses. Probate can be triggered by the oddest things: a car, a forgotten bank account, a safe deposit box no one can access, a valuable piece of personal property that beneficiaries are arguing about, the death of a named beneficiary, a lawsuit that was in progress before your death or initiated after your death, etc. Who’s going to foot the bill for the probate when you gave all of your money to people who might not have any skin in the game? Or who spent it as soon as they received it? Which child is going to use his own money to maintain your home and/or pay the mortgage, taxes, and insurance during the time it takes to clean it out and sell it?
  • “Don’t worry about getting married again even though both of you have kids from prior relationships. Whatever assets you go into the marriage with are still yours at your death and you can give them to whoever you wish.” Nope. Not unless you execute a good prenup, which covers what happens if there’s a divorce and also at your death. Florida’s rules for divorce and death are completely different, and you should know exactly what they are before combining families. Florida won’t allow a married person to leave everything to his or her kids at death. And, generally, a second marriage/blended family situation is going to require revocable living trusts  – not a “simple Will” – to accomplish each spouse’s goals.
  • “Want your home to go right to your only child at your death without going through probate? Just add her as a joint owner now.” Great idea if you want to expose your home to your child’s creditors, including a divorcing spouse. Also great if you want to ensure your child suffers adverse income tax consequences when he sells the house and if you want to make sure you suffer adverse consequences if you have to apply for Medicaid.
  • “Need to qualify for Medicaid for nursing home care? Just give your assets to your kids.” Not only is this really bad advice that could disqualify you from Medicaid, but if you don’t disclose the transfers to Medicaid, you’re also committing criminal fraud.

The point is that the advice given above MAY work for one particular person if their particular situation is just perfect. But only a lawyer will know whether it’ll work in your particular situation. And, he or she may have other options that may work better. So, while you can certainly ask people what they’ve done, keep in mind that it may not be the best solution for you.

Schedule a phone or in-person appointment with a real lawyer because it always costs more to fix the results of bad legal advice than doing it right in the first place.

Other articles you may find interesting:

An Estate Plan Is Necessary for the Unthinkable

A Health Care Surrogate’s Powers

Would you like to learn more about estate planning, elder law, asset protection planning, probate, and Medicaid planning in an informal, no-obligation setting?

Sign up for one of our free, educational workshops here.